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Solar on Multifamily Affordable Housing Program

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Solar on Multifamily Affordable Housing Program ALJ/JHE/VUK/jt2 PROPOSED DECISION Agenda ID #16083 Rev. 1 Ratesetting 12/14/2017 Item #53 Decision PROPOSED DECISION OF ALJs HECHT and KAO (Mailed 10/31/2017) BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking to Develop a Successor to Existing Net Energy Metering Tariffs Pursuant to Public Utilities Code Rulemaking 14-07-002 Section 2827.1, and to Address Other Issues Related to Net Energy Metering. (See Appendix C for Appearances) DECISION ADOPTING IMPLEMENTATION FRAMEWORK FOR ASSEMBLY BILL 693 AND CREATING THE SOLAR ON MULTIFAMILY AFFORDABLE HOUSING PROGRAM 201122198 - 1 - R.14-07-002 ALJ/JHE/VUK/jt2 PROPOSED DECISION Table of Contents Title Page DECISION ADOPTING IMPLEMENTATION FRAMEWORK FOR ASSEMBLY BILL 693 AND CREATING THE SOLAR ON MULTIFAMILY AFFORDABLE HOUSING PROGRAM ........................................................................ 1 Summary ............................................................................................................................ 2 1. Background ............................................................................................................... 3 1.1. Legislative Background ................................................................................ 3 1.1.1. Requirements of AB 693 ................................................................. 4 1.2. Procedural Background ................................................................................ 5 1.3. Affordable Housing Programs Under the California Solar Initiative ... 7 2. Introduction and Plan of this Decision ................................................................. 8 3. The SOMAH Program ............................................................................................. 9 3.1. Program Eligibility ...................................................................................... 10 3.1.1. Specific Eligibility Requirements ................................................ 12 3.2. Distribution of Program Benefits .............................................................. 14 3.2.1. Use of VNEM ................................................................................. 14 3.2.2. Tenant and Common Area Load Allocation ............................. 16 3.2.3. Ensuring Customer Benefit .......................................................... 18 3.2.3.1. Exclusion from Mandatory Time of Use Tariffs ................... 18 3.2.3.2. Tenants Must Receive the Full Benefit of VNEM Credits ... 21 3.2.3.3. Note on Benefit for Tenants in Federally Subsidized Affordable Housing .................................................................. 22 3.3. Additional Requirements for Participating Service Providers ............. 24 3.3.1. Third-Party Ownership Requirements ...................................... 24 3.3.2. Providing Economic Development Benefits Through Job Training and Local Hiring ........................................................... 25 3.3.3. Energy Efficiency Services and Coordination with Other Clean Energy Programs ................................................................ 27 3.4. Applicability of Additional MASH Program Requirements ................ 28 3.5. SOMAH Program Budget and Funding .................................................. 30 3.5.1. Funding Calculations .................................................................... 30 3.5.2. IOUs’ Funding Contributions and Accounting ........................ 34 3.5.3. IOU Accounting ............................................................................. 37 3.5.4. Allocation of Funding Between DAC and Low-Income Tenant Qualification Paths ........................................................... 37 4. Incentive Structure ................................................................................................. 39 - i - R.14-07-002 ALJ/JHE/VUK/jt2 PROPOSED DECISION Table of Contents (cont.) Title Page 4.1. Incentive Step-Down .................................................................................. 43 5. Program Administration ....................................................................................... 44 5.1. Administrative Structure ........................................................................... 44 5.2. Participation of Liberty and PacifiCorp ................................................... 48 5.3. Major Responsibilities of the Program Administrator .......................... 50 5.4. The Installation of SOMAH Projects by the Project Administrator ..... 52 6. Implementation Plan and Next Steps .................................................................. 53 6.1. Selection of a Program Administrator ..................................................... 53 6.2. Program Implementation via a Tier 3 Advice Letter ............................. 54 7. Evaluation, Measurement, and Verification....................................................... 56 8. Energy Division Budget and Activities ............................................................... 57 9. 2020 Program Review ............................................................................................ 58 10. Comments on Proposed Decision ........................................................................ 58 11. Assignment of Proceeding .................................................................................... 62 Findings of Fact ............................................................................................................... 62 Conclusions of Law ........................................................................................................ 65 ORDER ........................................................................................................................... 68 Appendix A - Public Utilities Code Section 2870 Appendix B - Summary of Solar on Multifamily Affordable Housing Program Appendix C - Appearances - ii - R.14-07-002 ALJ/JHE/VUK/jt2 PROPOSED DECISION DECISION ADOPTING IMPLEMENTATION FRAMEWORK FOR ASSEMBLY BILL 693 AND CREATING THE SOLAR ON MULTIFAMILY AFFORDABLE HOUSING PROGRAM Summary Assembly Bill (AB) 693 (Eggman), Stats. 2015, ch. 582, creates the Multifamily Affordable Housing Solar Roofs Program, with up to $100,000,000 annually in funding from Pacific Gas and Electric Company, San Diego Gas & Electric Company, Southern California Edison Company, Liberty Utilities Company, and PacifiCorp’s (collectively the investor-owned utilities) share of greenhouse gas allowance auction proceeds.1 This decision adopts a new Solar on Multifamily Affordable Housing (SOMAH)2 Program as a vehicle for implementation of AB 693, and provides the framework for the program’s implementation. Specifically, this decision addresses program goals, eligibility requirements, program administration, and program funding, and provides guidance for the selection and ultimate responsibilities of a statewide Program Administrator (PA). Consistent with AB 693, the new SOMAH program will provide incentives for the installation of solar distributed generation projects sited on existing multifamily affordable housing. In doing so, the SOMAH program will ensure that the benefits of such solar generation systems, especially the bill credits customers can receive with net-metered on-site solar generation, accrue primarily to the tenants of participating properties. This program, while similar 1 See Public Utilities Code Section 2870(c). 2 In view of the number of somewhat similar acronyms related to extending customer-sited solar installations to affordable housing, we have chosen one that is likely to reduce confusion among programs. - 2 - R.14-07-002 ALJ/JHE/VUK/jt2 PROPOSED DECISION in structure and goals to the Multifamily Affordable Solar Housing program, is a new program with different rules and eligibility requirements, and a new funding source. Under the framework created in this decision, the AB 693 program will be run by a single, statewide PA to be chosen by the Commission’s Energy Division from entities responding to a Request for Proposal (RFP) as described in this decision. This decision is intended to provide the basic requirements necessary to launch the RFP process and yield an effective statewide PA. Once a PA is selected, the PA will submit a Tier 3 Advice Letter containing specific proposals for implementing the policies adopted here, as further discussed below. The Commission may provide further direction on the contents of this Tier 3 implementation Advice Letter through one or more future Commission decisions or resolutions. 1. Background 1.1. Legislative Background Assembly Bill (AB) 693 created the Multifamily Affordable Housing Solar Roofs Program to provide financial incentives for the installation of solar photovoltaic (PV) energy systems on multifamily affordable housing properties throughout California. The statute, among other things, prescribes criteria for participation in the incentive program; identifies a funding source for the program; sets targets for installation of solar PV systems; identifies various required elements for the program; and gives direction to the Commission on administration of the program. Under AB 693, these services are to be funded using a percentage of the proceeds from the sale of greenhouse gas allowances allocated to California’s investor-owned utilities (IOUs) for the benefit of ratepayers. Senate Bill (SB) 92, - 3 - R.14-07-002 ALJ/JHE/VUK/jt2 PROPOSED DECISION adopted with the 2017-2018 State Budget in late June, clarifies the funding amounts available
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